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EBRD: Sanctions hurting Russia

LONDON, Sept. 18 (UPI) — The U.S. and European governments have imposed punitive sanctions on Russian energy companies Rosneft, Gazprom Neft and others in response to the crisis in Ukraine . Last week, the European Union increased the pressure with sanctions on deep water energy operations, arctic oil exploration and shale projects. The European Bank for Reconstruction and Development said the sanctions were taking a toll on the Russian economy. "The Western sanctions, combined with uncertainty about their possible escalation in the future, have negatively affected business confidence in Russia, constrained the ability of corporations and banks to access international debt markets, and contributed to capital flight," the bank said in a briefing. The Kremlin last week said it was the duty of the government to support the energy sector during what Rosneft Chief Executive Officer Igor Sechin said were difficult operating conditions. In terms of Ukraine, the EBRD […]

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Scrap South Stream, Europe says

BRUSSELS, Sept. 18 (UPI) — Russian energy company Gazprom touts South Stream as a pipeline that would help support European energy security by avoiding geopolitically sensitive territory in Ukraine. Russia meets about a quarter of Europe’s gas needs, though the bulk of those supplies run through the Soviet-era transit network in Ukraine. Members of the European Parliament passed a resolution Thursday expressing support for the ratification in Kiev of an association agreement with the EU. A cease-fire in eastern Ukraine appears to be holding, the resolution said, but it could break given recent Russian aggressions. "EU sanctions are just and must be stepped up," the resolution said. For South Stream, members of Parliament had their reservations, calling on "EU countries to cancel planned energy sector agreements with Russia, including the South Stream gas pipeline." European Energy Commissioner Guenther Oettinger in June said the South Stream project should be put […]

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Exxon Said to Halt Arctic Oil Well Drilling on Sanctions

Exxon Mobil Corp. (XOM) halted drilling on an offshore oil well intended as the first step in unlocking billions of barrels of crude in Russia ’s remote Arctic, according to people familiar with the project. Work stopped just a few days after the U.S. and European Union barred companies from helping Russia exploit Arctic, deep-water or shale- oil fields , said three people with knowledge of the rig’s operations who asked not to be named since they weren’t authorized to speak about the project. The U.S. sanctions, meant to punish Russia for escalating tensions in Ukraine, gave American companies until Sept. 26 to stop all restricted drilling and testing services. Exxon and Seadrill Ltd. (SDRL) ’s North Atlantic Drilling (NADL) unit are under the gun to finish or temporarily seal the $700 million well off Russia’s northern coast before the sanctions deadline, said Chris Kettenmann, chief energy strategist at […]

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Russian Billionaires Stung by Ukraine Bristle Over Arrest

The arrest of one of Russia ’s oldest billionaires is sending shivers down the backs of business owners already reeling from U.S. and European sanctions over President Vladimir Putin ’s policies in Ukraine. A decade after Mikhail Khodorkovsky ’s imprisonment led to Russia’s largest nationalization since the Soviet era, the prosecution of Vladimir Evtushenkov, 65, may prod businesses to pull even more money out of an economy on the verge of recession and relocate abroad, Alexander Shokhin , who lobbies on behalf of the country’s largest companies as head of the Russian Union of Industrialists & Entrepreneurs, said yesterday. Evtushenkov was charged with money-laundering and placed under house arrest two days ago, triggering a sell-off in shares of his companies, including AFK Sistema, and slicing his net worth by a third, to $4.5 billion, according to the Bloomberg Billionaires Index. Evtushenkov denies the charges. “This event could set a […]

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Russian Central Bank Fears Weak Oil Price Could Threaten Economy

The headquarters of Russia’s central bank in Moscow. The Bank of Russia said that inflationary expectations among households increased in August. Bloomberg News MOSCOW—The Bank of Russia said that the ruble and the Russian economy could be hit by sliding prices for commodities—the country’s key exports—if oil prices fail to recover in the midterm. The ruble hit fresh all-time lows on Tuesday, weakening to 38.93 against the dollar, as banks and companies bought foreign currencies and external markets remained largely closed to Russian borrowers. A drop in the price of Brent crude to $98 per barrel from above $115 three months ago has added to downward pressure on the ruble. In a quarterly report on its monetary policy, the central bank said that it forecasts prices for Urals crude blend, which usually trades a bit lower than Brent, to recover above $100 per barrel in the next few quarters. […]

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Russian crude oil exports seen down 6pc in Q4

MOSCOW: Exports of seaborne Russian Urals and ESPO crude oil blends were seen declining by 6.2 percent to 50.17 million tonnes in the last three months of the year from the previous quarter, traders said on Monday, citing a quarterly loading schedule. Russia has been cutting crude oil exports as it has increased production of oil products from its refineries. Traders also said that the Black Sea port of Novorossiisk is expected to load 7.4 million tonnes next quarter, down from 8.86 million tonnes. However, shipments of Azerbaijan crude via the port in the fourth quarter has not been yet agreed. Russian crude exports from the Baltic Sea port of Primorsk were seen down to 11.5 million tonnes in the fourth quarter from 12.5 million tonnes in July-September. Shipments from the neighbouring port of Ust-Luga were scheduled unchanged, at 6.5 million tonnes. Fourth-quarter ESPO crude exports from the Pacific […]

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Shell notes strong ties to Russian energy

MOSCOW, Sept. 15 (UPI) — A spokesman for Royal Dutch Shell said Monday the company was reviewing what impact, if any, sanctions would have on its ties to the Russian energy sector. "We are proud of our strong partnership with Russian companies," the spokesperson said. "We will explore the latest sanctions and their possible impact on our business." The European Union last week enacted tighter sanctions on Russia’s energy sector in response to ongoing crises in Ukraine. The measure was enforced in coordination with Washington. Russia’s government relies heavily on oil revenue. A spokesman for Shell told state news agency RIA Novosti the sanctions were under review. The Russian currency was trading at a record low against the U.S. dollar as sanctions started to take their toll on the Russian economy. Shell is working alongside Russian energy company Gazprom on the Sakhalin liquefied natural gas project in the Far […]

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Gazprom Neft marks arctic milestone

MOSCOW, Sept. 15 (UPI) — Russian oil company Gazprom Neft said Monday it reached a milestone with the production of its 1 millionth barrel of oil from the arctic Prirazlomnoye field. Gazprom Neft Board Chairman Alexander Dyukov said his is the first Russian company to pull oil from the Russian arctic shelf . "The production of the millionth barrel of oil at the Prirazlomnoye field is a milestone and further proof of the consistent development of the project and its final transition into full-scale development," he said in a statement. "Gazprom Neft plays a leading role in developing oil deposits on the Arctic shelf and we can build on this experience for new Arctic projects in the future." The company expects 2.2 million barrels worth of production from Prirazlomnoye during the first full year of development. A tanker with 1 million barrels worth of storage capacity is set to […]

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EU Postpones Decision on Granting Russia Gas-Pipeline Access

BRUSSELS-The European Union Monday again postponed a decision on whether to grant Russia full access to its OPAL natural-gas pipeline, frustrating Moscow’s efforts to boost energy exports to the 28-country bloc. The European Commission cited technical reasons for the delay, which coincided with its announcement that planned talks between Russia, Ukraine and the EU to resolve a gas feud were also postponed. The commission had hoped to hold the three-way gas talks in Berlin on Saturday in a bid to break the long-running deadlock between Kiev and Moscow, but said an agenda clash on the Russian side meant the negotiations would have to be held at a later date. Russia suspended gas deliveries to Ukraine in June over a pricing dispute that the EU has been hoping to resolve ahead of winter, fearing energy shortages in several European countries that are heavily dependent on Russian gas imports. No fresh […]

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Russian ruble drops to historic low amid sanctions

MOSCOW (AP) — Russia’s currency dropped to an all-time low against the dollar on Tuesday as investors fret about long-term economic damage from Western sanctions. The United States and the European Union last week imposed a new round of sanctions against Russia for its actions in Ukraine that consisted in, among other things, blocking off Western financial markets to key Russian companies. The Russian currency fell more than 1 percent to 38.80 rubles against the U.S. dollar by noon Moscow time Tuesday. The ruble has lost over 2.7 percent in just two days. The Russian Central Bank allows the ruble to trade in a range against the dollar and sometimes intervenes in markets to prop it up. It has not been doing so in the past months, however, leaving the ruble to trade only 0.40 rubles away from the minimum level. Economist Alexei Kudrin, who served as finance minister […]

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